Latest US trade pact lays groundwork for FTA

THE FIRST trade, investment and development co-operation agreement (Tidca) just signed by the trade ministers of the US and the Southern African Customs Union (Sacu) has laid the groundwork for a preferential trade agreement (PTA) and eventually a free trade agreement (FTA). It will also identify which industries can be included in a free trade pact, and which are too sensitive, says Andrè Erasmus, senior manager of trade and customs consultancy, Deloitte. On its own, however, it has little impact, said Erasmus. According to US trade representative, Susan C Schwab, the Tidca will be a formal mechanism for the US and Sacu to conclude a range of interim trade-related agreements, cooperative work and other trade-enhancing initiatives. It will also allow the two sides to develop work plans on issues such as sanitary and phytosanitary barriers; technical barriers to trade; trade facilitation and investment promotion that should lead to increased US-Sacu trade and investment in the near future. “Before we address the issues of an FTA,” said Schwab, “we are using the new Tidca to expand market access; strengthen the links between trade and economic development strategies; encourage greater foreign investment; and promote regional economic integration and growth.”